Considering Blockchain Technology and Fairness Concerns for Supply Chain Pricing Decisions under Carbon Cap-and-Trade Mechanism

Yande Gong, Xinze Jiang (), Zhe Wang and Jizhou Zhan
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Yande Gong: School of Business, Nanjing Audit University, Nanjing 211815, China
Xinze Jiang: School of Business, Nanjing Audit University, Nanjing 211815, China
Zhe Wang: School of Business, Nanjing Audit University, Nanjing 211815, China
Jizhou Zhan: School of Business, Nanjing Audit University, Nanjing 211815, China

Mathematics, 2024, vol. 12, issue 16, 1-32

Abstract: To address the growing demand for green development, governments worldwide have introduced policies to promote a green economy. Among these policies, the carbon cap-and-trade mechanism is adopted as an effective approach to control carbon emissions. Additionally, blockchain may increase transparency in the industrial process. Despite focusing on improving its own green standards, the supply chain needs to establish stable cooperative relationship. Thus, we focus on a supply chain consisting of a dominant manufacturer and a retailer, where the manufacturer opts for implementing blockchain and the retailer selects their stance on fairness. We construct a Stackelberg game model and use backward induction to obtain the equilibrium solutions. In the supply chain, the highest profits can be achieved when the manufacturer adopts blockchain technology, provided that the cost of application is relatively low. For manufacturer and retailer, when the cost of applying blockchain is relatively low, they can both obtain maximized profits without applying blockchain and the retailer does not have fairness concerns. However, as the cost of inducing blockchain and the product’s reduction in carbon emission increase, the optimal strategies for manufacturer and retailer begin to diverge, which may affect the stability of the supply chain.

Keywords: supply chain; blockchain; fairness concerns; carbon cap-and-trade mechanism (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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